CBR Tapped for $900 Million

Budget shortfalls marked these years, ultimately leading to approval of a total of $900 million in draws from the Constitutional Budget Reserve, which requires a three-quarters majority vote of both chambers. The second such withdrawal-$400 million in 1996-was not approved until a special session and 151 total days in session for the year; however, those funds were not ultimately needed as oil prices rose as the fiscal year progressed, leading to a budget surplus. The special session included a $1 per pack tax increase on tobacco, which failed, and the ratification of several public employee union contracts, which passed only after substantial political wrangling.

Other issues receiving considerable attention included sweeping "welfare" reform, a final determination on how the University of Alaska could develop 350,000 acres of land to bolster its budget, and education reform that introduced charter schools to the state.

Familiar points of contention were revisited including the following:

A battle over legislation reducing state royalty shares on small and high-cost oil fields to promote their development;

The federal government announced plans to expand its control of subsistence hunting and fishing; and

Major tort reform reducing filing time limits, penalizing fraudulent claims, and capping punitive damages at $300,000 was vetoed by the governor, in part due to fears that a retroactivity provision in the legislation could nullify the Exxon Valdez oil spill award.